Managed strategies
PAMM, MAM and copy trading
These three terms are often mixed up. Each describes a different relationship between a manager and a client, with its own mechanics and obligations. This page explains the difference and what a brokerage needs in place before offering any of them.
- Sample Client AEquity $25,000.00, 50%0.50 lots
- Sample Client BEquity $15,000.00, 30%0.30 lots
- Sample Client CEquity $10,000.00, 20%0.20 lots
Each account trades its own share, filled at the price on screen.
Sample strategies, sample accounts and sample market data. No real performance is shown.
The three models compared
Copy trading is the simplest. A client chooses a strategy and their account mirrors its trades proportionally. The client keeps their own account and can stop at any time. It is the easiest to explain to a client and the easiest to unwind.
PAMM pools client money into a single allocated fund that a manager trades, with profit and loss distributed by each participant's share. MAM is closer to copy trading in mechanics but built for a manager running many client accounts under one interface, with allocation rules per account.
Vendor descriptions often go vague on the PAMM arithmetic. The pool is denominated in units. Illustratively: a $100,000 pool at a net asset value of $1.00 is 100,000 units, so an investor depositing $10,000 holds 10,000 units. If the manager finishes the month up 8 percent, the unit value is $1.08 and the investor's stake is worth $10,800. A 20 percent performance fee applies to the $800 gain, which is $160, and on this platform that fee is crystallised by cancelling the equivalent units, $160 at $1.08 is about 148 units, from the investor's holding. The investor keeps roughly 9,852 units worth about $10,640, and a fee never moves the unit value, so it leaves every other participant's stake as it was.
Read moreShow less: The three models compared
The practical difference for a broker is what happens when something goes wrong, and how clearly you can show each client what was done with their money and why.
- Copy trading
Client mirrors a strategy in their own account and can stop whenever they choose.
- PAMM
Client money is pooled and traded as one, with results distributed by share of the pool.
- MAM
A manager operates many separate client accounts through one interface, with allocation rules.
On your platform
How it fits the rest of the platform
One deployment on your brand, domain and database: the terminal your clients trade on, and the CRM your team runs.
Sample market data and sample clients. "Your Brand" stands for your own name and logo.
What to settle before you offer any of it
Offering managed or copied strategies changes your regulatory position in most jurisdictions, sometimes substantially, because you are facilitating someone managing other people's money.
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Ask your regulatory adviser whether your licence permits it, and under what conditions, before you look at software.
There are also obligations you take on regardless of the regime. Clients need to understand what they are agreeing to, what they are being charged, and how to stop. A managed product that a client cannot exit or understand invites complaints.
What the platform provides
Copy trading is built in, with strategies clients can subscribe to and unsubscribe from, proportional allocation to each subscriber's account, and the position and performance history behind each strategy.
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Because the copy engine runs inside the same system as the accounts it trades, subscriptions, executions and balances stay consistent without a nightly reconciliation between separate products. That is the failure mode of bolted on copy trading: a client's copied position and their account balance disagreeing, and nobody able to say which is right.
Every action a manager or a member of staff takes on these accounts lands in the same audit trail as everything else, with actor and timestamp.
Where strategy performance belongs
This page shows no performance figures, return charts or leaderboard screenshots.
Read moreShow less: Where strategy performance belongs
Published strategy performance is one of the most heavily scrutinised things a brokerage can put in front of retail clients, and marketing pages are the wrong place for it. A strategy's returns belong inside your platform, shown to a client in context with the risk disclosures your jurisdiction requires.
The software supports showing clients what they need to see. What you choose to display, and with what warnings, is a decision for you and your compliance adviser.
Common questions
Anything else? Our team answers 24/7.
Do you support copy trading out of the box?
Yes. Strategies, subscriptions and proportional allocation are built into the platform, and they switch on with the Growth plan.
What is the difference between PAMM and MAM?
PAMM pools client money into one fund traded as a whole, with results distributed by share. MAM keeps client accounts separate and lets a manager operate them together with allocation rules.
Does offering this change our regulatory position?
In most jurisdictions yes, because you are facilitating the management of other people's money. Establish what your licence permits with your regulatory adviser before you build a product around it.
Can clients leave a strategy whenever they want?
With copy trading, yes, because the client keeps their own account. Leaving a pooled structure is less immediate, so explain the difference to clients clearly.
Why do you not show performance figures here?
Because a vendor marketing page is the wrong place for them. Strategy performance should be shown to clients inside your platform, in context and with the disclosures your jurisdiction requires.
See how managed strategies fit the rest of the platform
Book a demo and we will walk through it with real accounts.